Hamilton v. Yavapai Community College District

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

8 Daniel Hamilton, No. CV-12-08193-PCT-GMS 9 LEAD CASE Plaintiff, 10 No. CV-15-08095-PCT-GMS v. (CONSOL. FOR TRIAL) 11 Yavapai Community College District, et al., 12 ORDER Defendants. 13

14 Guidance Academy LLC, et al., 15 Counterclaimants, 16 v. 17 Daniel Hamilton, 18 Counterdefendant. 19 20 Daniel Hamilton,

21 Plaintiff,

22 v.

23 Yavapai Community College District, et al.,

24 Defendants.

25 and

26 United States of America,

27 Movant.

28 1 Pending before the Court is Daniel Hamilton’s (“Plaintiff”) Motion for Attorneys 2 Fees (Doc. 978). For the reasons below, Plaintiff’s motion is denied. 3 BACKGROUND 4 The facts of this matter are set forth in this Court’s prior orders and are well-known 5 to the parties. Plaintiff alleges that the Defendants engaged in a fraudulent scheme to obtain 6 funding from the United States Department of Veterans Affairs (“VA”). His claims 7 essentially assert Defendants defrauded the VA by obtaining funding in violation of 38 8 C.F.R. § 21.4201, otherwise known as Regulation 4201 or the 85/15 Rule. Defendants 9 Guidance Academy, LLC, John L. Stonecipher, and Amanda Stonecipher (“Defendants- 10 Counterclaimants”) asserted two counterclaims against Plaintiff for defamation and 11 intentional interference with contract relations. At Defendants-Counterclaimants’ request, 12 the Court dismissed the defamation counterclaim at a telephonic status conference nearly 13 two weeks before trial. As part of the dismissal, the Court permitted Plaintiff to file an 14 application for attorney’s fees after the entry of judgment. The Court held a jury trial from 15 June 8, 2021 to June 26, 2021. The jury found in favor of all Defendants on all counts. 16 Plaintiff now asks for reasonable attorney’s fees for the dismissed counterclaim. 17 DISCUSSION 18 Plaintiff argues that the Court should award fees as a condition of dismissal under 19 Rule 41(a)(2). However, Rule 41 does not apply because it governs the dismissal of all 20 claims against a particular defendant, not the piecemeal dismissal of individual claims 21 against a defendant. See, e.g., Hells Canyon Pres. Council v. U.S. Forest Serv., 403 F.3d 22 683, 687 (9th Cir. 2005); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1392 (9th Cir. 23 1988). When a party seeks to dismiss less than all the claims asserted against a defendant, 24 the proper vehicle for dismissal is Rule 15. Ethridge, 861 F.2d at 1392; 8 James Wm. 25 Moore, Moore’s Federal Practice § 41.13; see also Winkler v. GM Law Firm LLC, No. 26 CV-20-08248-PCT-DWL, 2020 WL 7027562, at *1 (D. Ariz. Nov. 30, 2020). Unlike Rule 27 41, Rule 15 does not explicitly allow the Court to impose conditions when it grants leave 28 to amend. See Stanton v. Cutter Honolulu Inc., No. 19-00239 JAO-WRP, 2019 WL 1 11553474, at *2 (D. Haw. Oct. 15, 2019) (holding that courts cannot award attorneys’ fees 2 under Rule 15); Duong-Tran v. Kaiser Found. Health Plan of the Nw., No. 08–120–AC, 3 2008 WL 1909221, at *5–6 (D. Or. Apr. 28, 2008) (holding that attorneys’ fees are 4 unavailable under Rule 41 when the plaintiff dismisses fewer than all claims against a 5 defendant); see also Restoration Indus. Ass’n Inc. v. ThermaPure Inc., No. CV 13-03169- 6 JVS (Rzx), 2014 WL 12603210, at *3–4 (C.D. Cal. Apr. 7, 2014) (“Because Rule 15 7 applies, and not Rule 41, attorney’s fees are not appropriate here.”). However, the Ninth 8 Circuit has held that “a district court, in its discretion, may impose costs pursuant to Rule 9 15 as a condition of granting leave to amend in order to compensate the opposing party for 10 additional costs incurred because the original pleading was faulty.” Gen. Signal Corp. v. 11 MCI Telecomms. Corp., 66 F.3d 1500, 1514 (9th Cir. 1995) 12 Here, Defendants-Counterclaimants asserted two counterclaims against Plaintiff. 13 (Doc. 132 at 25–27.) At the time the Court issued its order dismissing the defamation 14 claim, there remained a pending claim for intentional interference with contractual 15 relations. That claim was not dismissed until trial. (Doc. 974 at 2); (Doc. 939 at 136–38.) 16 Therefore, Rule 41 does not apply to the dismissal of the defamation claim; instead, Rule 17 15 applies, and the Court may condition the dismissal on an award of fees only if the 18 original pleading was “faulty.” See East Bay Drivers Ass’n v. Kaur, No. C03–1241 SI, 19 2003 WL 21439216, at *3 (N.D. Cal. June 9, 2003); Carlin v. DairyAmerica, Inc., No. 20 1:09–CV–00430 AWI EPG, 2017 WL 3671860, at *19 (E.D. Cal. Aug. 25, 2017). 21 Defendants-Counterclaimants’ original pleading was not “faulty.” The defamation 22 claim survived a motion to dismiss (Doc. 184), motion for judgment on the pleadings (Doc. 23 416), and a motion for summary judgment (Doc. 620). Further, as it pertains to the tort 24 claims that were dismissed, Plaintiff fails to offer any authority that attorneys’ fees are 25 awardable under Arizona state law for prevailing in a tort case. For these reasons, the Court 26 declines to award fees. 27 CONCLUSION 28 Because the Court lacks the power to condition the defamation claim’s dismissal on an award of fees, Plaintiff's motion is denied. 2 IT IS HEREBY ORDERED that Plaintiff's Motion for Attorneys Fees (Doc. 978) 3|| is DENIED. 4 Dated this 3rd day of February, 2022. ° Wars ) 6 A Whacrsay Fotos 7 Chief United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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